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If you've worked in manufacturing your whole life, then you likely know that U.S. manufacturing output is at or near all-time highs. While China is a major play

If you've worked in manufacturing your whole life, then you likely know that U.S. manufacturing output is at or near all-time highs. While China is a major player, it's not true that it dominates “just about everything.” In fact, China is now offshoring some of its own manufacturing to lower-cost countries. The reality is that long-term profitability comes from specialization and value-added production, not from trying to manufacture everything, especially low-margin goods. Even China recognizes this. TL;DR: You don’t get rich making cheap junk. That’s why both China and the U.S. are evolving their manufacturing strategies. Moving on to AI: right now, it's a powerful productivity tool, and that’s a good thing. Productivity growth has been sluggish since the PC boom of the 1980s, and AI could help reverse that trend. With aging populations and rising retirement rates, many economies are facing labor shortages. AI can help fill those gaps by automating routine tasks and boosting efficiency. HR departments have long struggled with the looming loss of 20-40% of their workforce over the next decade due to retirement. AI can help organizations adapt and stay competitive as their most experienced staff exits the workforce. It could also ease wage pressure caused by labor shortages due to retirement, helping to keep inflation in check. AI is how we’ll navigate the Boomer and late Gen X retirement wave. As you can see, I don’t share the current wave of pessimism. The best approach remains the same: keep six months of cash on hand, and invest in high-quality equities from around the world. That’s always been sound advice-and it still is.

robomartin 1y ago
> If you've worked in manufacturing your whole life, then you likely know that U.S. manufacturing output is at or near all-time highs. The fallacy in these numbers is that manufacturing output does not measure the origins of the supply chain. In other words, if Ford makes lots of cars and, say, 75% of what goes into making those cars comes from abroad, we measure the end-product value in calculating manufacturing output and ignore the fact that virtually none of the parts of the car are made in the US. For example, the Ford Mustang Mach-E only has 13% of US/Canada parts. The Buick Encore, 2%, etc. Source: https://www.carscoops.com/wp-content/uploads/2025/03/MY2025-AALA-Alphabetical-2.4.25-1.pdf https://www.carscoops.com/wp-content/uploads/2025/03/MY2025-... Manufacturing output does not measure anything that is actually relevant to the root issues in this discussion. It's a number politicians can use to make people believe they are doing a great job. In reality, its, well, fake news. It's like saying that someone looks fantastic while, in reality, they have stage 4 cancer eating away at them. > The reality is that long-term profitability comes from specialization and value-added production, not from trying to manufacture everything, especially low-margin goods. Even China recognizes this. Anyone in industry understands full-well that trying to manufacture everything is in a range between foolish and impossible. The message --well, my message anyway-- is that a future where we manufacture nearly zero is the problem. We will not get to zero, of course. However, as I like to say, you are not going to float a sizable economy purely on AI, web development and Etsy trinkets made in your garage. A robust industrial base is critically important. We don't have to make everything, but we should be able to make a lot more products than were we are today. And, as I discuss in another comment, having a single point of failure (pandemic: we could not make masks, medical supplies and equipment) is terribly dangerous.
- taylodl 1y ago
  > The fallacy in these numbers is that manufacturing output does not measure the origins of the supply chain. Manufacturing GDP is based on value added, the difference between the value of output and the cost of intermediate inputs (including imported parts). So, if Ford imports parts but adds value through design, engineering, assembly, testing, and quality control in the U.S., that value is counted in U.S. manufacturing GDP. Imported parts are subtracted to avoid double-counting. U.S. manufacturing GDP is at or near all-time highs. We are nowhere close to “manufacturing nearly zero.” That said, you raise an important point about over-dependence, which is a real issue. The pandemic exposed how fragile our supply chains are, like the inability to produce basic medical supplies. The U.S. had not treated the manufacture of masks or even components for weapons systems as strategic capabilities worth preserving. But that’s a far cry from the claim that "we don’t make anything anymore." We do-and we make a lot. The challenge is ensuring we can make enough of the right things when it matters and keep the markets as free as possible.
  - robomartin 1y ago
    > We are nowhere close to “manufacturing nearly zero.” In relative terms, we don't make anything. The problem is that this is largely invisible to people who are not in the business of making things. Manufacturing is crucially important to an economy. Note that I did not say "assembly". Most of what we do (US and Europe) is assembly from parts made mostly in China. That's why manufacturing output is not a measure of the gradient we've been descending. Let me make a parallel with the Amazon third party seller story. When Amazon opened the doors to third party sellers there was a rush of entrepreneurs looking to sell all kinds of products on the platform. Because you can't make almost anything in the US any more, this mostly consisted of people finding products in China to white label or, in very few cases, do create their own products to manufacture in China. You'd order pallets full of product, ship them directly to Amazon warehouses and you were off to the races. Lots of people made lost of money. Millions. At some point, their suppliers, the very same companies they sourced products from in China, realized they could list the same products on Amazon on their own. And that's precisely what they did. The lack of barriers to entry made it brilliantly simple. Their cost basis was much lower. American and European third party sellers were decimated. I don't have statistics on how many survived. Through participation in my local business community, I happen to know many people who were selling through Amazon. They got destroyed. In many cases their suppliers came into the market with products the American companies developed (and paid for the R&D) themselves, ignoring all IP. At a larger scale, that's the problem we are facing. We don't make anything. If a company like BYD were to be allowed to enter this market, US auto manufacturers would be destroyed within two to five years at most. Gone. So, it isn't about making everything. It's about making enough to be resilient and actually have an industrial base. It's about being manufacturers, not assemblers deeply-dependent on China and others.

robomartin 1y ago

> If you've worked in manufacturing your whole life, then you likely know that U.S. manufacturing output is at or near all-time highs. The fallacy in these numbers is that manufacturing output does not measure the origins of the supply chain. In other words, if Ford makes lots of cars and, say, 75% of what goes into making those cars comes from abroad, we measure the end-product value in calculating manufacturing output and ignore the fact that virtually none of the parts of the car are made in the US. For example, the Ford Mustang Mach-E only has 13% of US/Canada parts. The Buick Encore, 2%, etc. Source: https://www.carscoops.com/wp-content/uploads/2025/03/MY2025-AALA-Alphabetical-2.4.25-1.pdf https://www.carscoops.com/wp-content/uploads/2025/03/MY2025-... Manufacturing output does not measure anything that is actually relevant to the root issues in this discussion. It's a number politicians can use to make people believe they are doing a great job. In reality, its, well, fake news. It's like saying that someone looks fantastic while, in reality, they have stage 4 cancer eating away at them. > The reality is that long-term profitability comes from specialization and value-added production, not from trying to manufacture everything, especially low-margin goods. Even China recognizes this. Anyone in industry understands full-well that trying to manufacture everything is in a range between foolish and impossible. The message --well, my message anyway-- is that a future where we manufacture nearly zero is the problem. We will not get to zero, of course. However, as I like to say, you are not going to float a sizable economy purely on AI, web development and Etsy trinkets made in your garage. A robust industrial base is critically important. We don't have to make everything, but we should be able to make a lot more products than were we are today. And, as I discuss in another comment, having a single point of failure (pandemic: we could not make masks, medical supplies and equipment) is terribly dangerous.

taylodl 1y ago
> The fallacy in these numbers is that manufacturing output does not measure the origins of the supply chain. Manufacturing GDP is based on value added, the difference between the value of output and the cost of intermediate inputs (including imported parts). So, if Ford imports parts but adds value through design, engineering, assembly, testing, and quality control in the U.S., that value is counted in U.S. manufacturing GDP. Imported parts are subtracted to avoid double-counting. U.S. manufacturing GDP is at or near all-time highs. We are nowhere close to “manufacturing nearly zero.” That said, you raise an important point about over-dependence, which is a real issue. The pandemic exposed how fragile our supply chains are, like the inability to produce basic medical supplies. The U.S. had not treated the manufacture of masks or even components for weapons systems as strategic capabilities worth preserving. But that’s a far cry from the claim that "we don’t make anything anymore." We do-and we make a lot. The challenge is ensuring we can make enough of the right things when it matters and keep the markets as free as possible.
- robomartin 1y ago
  > We are nowhere close to “manufacturing nearly zero.” In relative terms, we don't make anything. The problem is that this is largely invisible to people who are not in the business of making things. Manufacturing is crucially important to an economy. Note that I did not say "assembly". Most of what we do (US and Europe) is assembly from parts made mostly in China. That's why manufacturing output is not a measure of the gradient we've been descending. Let me make a parallel with the Amazon third party seller story. When Amazon opened the doors to third party sellers there was a rush of entrepreneurs looking to sell all kinds of products on the platform. Because you can't make almost anything in the US any more, this mostly consisted of people finding products in China to white label or, in very few cases, do create their own products to manufacture in China. You'd order pallets full of product, ship them directly to Amazon warehouses and you were off to the races. Lots of people made lost of money. Millions. At some point, their suppliers, the very same companies they sourced products from in China, realized they could list the same products on Amazon on their own. And that's precisely what they did. The lack of barriers to entry made it brilliantly simple. Their cost basis was much lower. American and European third party sellers were decimated. I don't have statistics on how many survived. Through participation in my local business community, I happen to know many people who were selling through Amazon. They got destroyed. In many cases their suppliers came into the market with products the American companies developed (and paid for the R&D) themselves, ignoring all IP. At a larger scale, that's the problem we are facing. We don't make anything. If a company like BYD were to be allowed to enter this market, US auto manufacturers would be destroyed within two to five years at most. Gone. So, it isn't about making everything. It's about making enough to be resilient and actually have an industrial base. It's about being manufacturers, not assemblers deeply-dependent on China and others.